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In re Penthouse Executive Club: Can you Strip Away the Confidentiality of Litigation-Related Communications by Posting Them on Facebook?
If you are a plaintiff in a lawsuit, can you discuss the lawsuit with other plaintiffs on Facebook and keep these communications confidential? What if the communications are between you and someone you hope will join the lawsuit but is not yet a party? These questions were front and center before a District Court Judge in New Yorkregarding a class action wage and hour case under the Fair Labor Standards Act (“FLSA”). In re Penthouse Executive Club Compensation Litigation involves allegations by a group of exotic dancers that the Penthouse Executive Club failed to, among other things, properly pay them overtime and their share of tips. As often is the case with FLSA matters, the named plaintiffs converted their lawsuit into a class or collective action. To do so, they obtained from the court the right to issue notice to other similarly situated strippers who were then able to opt… Continue Reading
Public Employees: Anything You “Like” Can and Will Be Used Against You
What does it mean to “like” a Facebook page? As Facebook users know, clicking the “like” button sends a link to your Facebook friends’ newsfeeds, noting which of their friends “liked” the link. The post will also appear on your profile as one of your “Likes and Interests.” While it is possible to add a comment when “liking” a post, it is not necessary. However, public employees in Virginia should be aware that merely “liking” a page, without further comment, may not qualify as speech protected by the First Amendment, even if the page relates to a matter of public concern. Earlier this month, a federal judge granted summary judgment to Sheriff B.J. Roberts of Hampton, Virginia. Sheriff Roberts had terminated six employees for various reasons, including his belief that their actions “hindered the harmony and efficiency of the office.” The terminated employees then filed suit, alleging that they were… Continue Reading
A Picture is Now Worth 800 Million Users
Facebook’s acquisition of the popular photo-sharing app Instagram portends exciting new opportunities for brands. As an example of Instagram’s popularity, since December its user numbers nearly doubled—from 15 million users to 27 million users. Likewise, when Instagram became available on Android, the number of users increased to 30 million, and one million of those users registered within the first 24 hours of availability. So, what does this acquisition mean for brands? First, not all Instagram users are Facebook users and vice versa. Obviously, with Instagram’s 30 million users and Facebook’s 800 million users, their integration provides brands with the opportunity to reach significantly more consumers. Moreover, if Instagram remains independent from Facebook, Instagram users will not be limited to sharing their photos on Facebook. Instead, they will continue to share them on other social networks like Twitter, Flickr, Tumblr, Posterous and Foursquare. What this means for brands is they will… Continue Reading
Australian Treasury Issues Draft Amendment to Impose Director Liability for Superannuation Obligations
Under new legislation that has been introduced into Parliament, directors would be personally liable for their company’s unpaid superannuation guarantee amounts. When a company fails to meet its superannuation funding obligations, the Commissioner of Taxation would be authorized to step in and assess personal liability against the directors for the unpaid amounts. This is in addition to liability that directors could face for pay-as-you-go tax withholding liability. In addition, the Commissioner of Taxation would no longer be required to give 21 days notice before starting proceedings against directors. The proposed legislation can be found here.
Ontario (Canada) Issues Draft Regulations Under the Pension Benefits Act
The Ministry of Finance issued changes to Regulation 909 that would (1) enable the proclamation of the “retired member” provisions in the PBA; (2) implement immediate vesting for plan members and increase the threshold for the small pension payout rule; (3) further clarify the surplus payment rules; and (4) reflect changes to the Income Tax Act (Canada) regarding Individual Pension Plans. Draft Regulations are here. Discussion paper can be found here.
Court Finds Personal Jurisdiction Over a Foreign Parent Regarding Controlled Group Liability for U.S. Subsidiary’s Pension Plan
The Pension Benefit Guaranty Corporation (PBGC) brought suit against Asahi Tec Corporation, a Japanese company, asserting controlled group liability against Asahi for the underfunding of the terminated pension plan maintained by its bankrupt U.S. subsidiary, Metaldyne. Asahi filed a motion to dismiss, asserting that the U.S. Federal District Court for the District of Columbia lacked personal jurisdiction over Asahi. Asahi argued that because it did not commit any acts with respect to the pension plan (with either funding or the termination), and because its sole contact with the United States was its ownership of a U.S. subsidiary, there was no basis for personal jurisdiction. The court disagreed, noting the PBGC’s claims against Asahi were not based on the pension plan’s termination or underfunding, but were predicated solely on Asahi’s status as a member of the controlled group through its acquisition of Metaldyne. The court denied the motion to dismiss on… Continue Reading
Unfashionable Firings: Judge Orders Clothing Store to Rehire Employees Who Lost Their Jobs Based on Facebook Posts.
Can you fire an employee who post on Facebook: “Hey dudes, it’s totally cool, tomorrow, I’m bringing aCaliforniaworkers rights book to work. My mom works for a law firm that specializes in labor law and BOY will you be surprised by all the crap that’s going on that’s in violation?” The employee was one of three workers who had been complaining to store management that the store should shut down an hour early so employees could avoid unsavory street people when exiting the store late at night. After a heated exchange with store management over the subject, three employees complained about the manager on Facebook and posted about brining the “Californiaworkers rights book,” which the employee did the next day. According to Administrative Law Judge William G. Kocol of the National Labor Relations Board, clothing retailer Bettie Page Clothing committed an unfair labor practice when it fired these three employees… Continue Reading
California Court Dismisses Say-on-Pay Shareholder Derivative Lawsuit
A California Superior Court recently dismissed a say-on-pay shareholder derivative lawsuit that was based, in part, on statements made by the defendant in its Compensation Discussion and Analysis (CD&A) section of the proxy statement. The basis for the lawsuit against the defendant’s board of directors was the approval of the compensation plan in January 2011, after a shareholder vote rejected that plan. Despite alleged poor performance results in 2010, and statements by the defendant that its pay for performance policy provided that compensation would be decreased for poor performance, the defendant’s board of directors nevertheless increased executives’ compensation for 2011. The court held that the plaintiffs had not overcome the presumption of the business judgment rule. Notwithstanding what appears to be boilerplate language in the CD&A, the court found the statements to be evidence that the defendant exercised valid business judgment. In finding so, the court held that the plaintiffs… Continue Reading
JOBS Act FAQs Regarding Disclosure Exemption for Emerging Growth Companies
As previously reported, the JOBS Act exempts an “emerging growth company” from certain executive compensation reporting requirements. Recent SEC FAQs provide additional guidance regarding the scaled down reporting requirements. An emerging growth company may amend its registration statement that was initially filed prior to April 5, 2012 to provide the scaled disclosure by either a pre-effective amendment to a pending registration statement or in a post-effective amendment. In addition, an emerging growth company that completed its initial public offering after December 8, 2011 and prior to April 5, 2012 may file its next periodic report using the scaled disclosure provisions. Finally, an emerging growth company may decide to comply with some of the scaled disclosure provisions and some of the regular disclosure requirements if it does not want to comply with all of the scaled disclosure provisions. The SEC’s FAQs can be found here.
IRS Announces Health Savings Account Limits for 2013
The IRS released the 2013 inflation adjusted deduction limitation amounts for annual contributions made to health savings accounts under Section 223 of the Internal Revenue Code. For the 2013 calendar year, the annual limitation on deductions under Section 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,250. The annual limitation for the 2013 calendar year for an individual with family coverage under a high deductible health plan is $6,450. For the 2013 calendar year, a high deductible health plan is defined under Code Section 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,250 for self-only coverage or $2,500 for family coverage, and the annual out-of-pocket expenses do not exceed $6,250 for self-only coverage or $12,500 for family coverage. Revenue Procedure 2012-26 can be found here.
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